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Shinhan Financial Group Co Ltd's Dividend Analysis

Assessing the Sustainability and Growth of SHG's Dividends

Shinhan Financial Group Co Ltd (NYSE:SHG) recently announced a dividend of $0.4 per share, payable on a date yet to be announced, with the ex-dividend date set for 2024-02-22. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Shinhan Financial Group Co Ltd's dividend performance and assess its sustainability.

What Does Shinhan Financial Group Co Ltd Do?

Shinhan Financial is Korea's largest banking group, with a significant market presence in loans and a diverse portfolio that includes credit card services, brokerage, insurance, and asset management. The group's growth trajectory has been marked by strategic mergers and acquisitions, positioning it as a formidable private-sector bank with a global footprint. This diversified business model supports its financial stability and the ability to generate consistent revenue streams.

Shinhan Financial Group Co Ltd's Dividend Analysis
Shinhan Financial Group Co Ltd's Dividend Analysis

A Glimpse at Shinhan Financial Group Co Ltd's Dividend History

Shinhan Financial Group Co Ltd has upheld a steady dividend payment tradition since 2021, rewarding shareholders with quarterly distributions. This consistent approach reflects the company's commitment to returning value to its investors. Below is a chart illustrating the annual Dividends Per Share to track historical trends.

Shinhan Financial Group Co Ltd's Dividend Analysis
Shinhan Financial Group Co Ltd's Dividend Analysis

Breaking Down Shinhan Financial Group Co Ltd's Dividend Yield and Growth

As of today, Shinhan Financial Group Co Ltd boasts a 12-month trailing dividend yield of 3.64% and a forward dividend yield of 4.87%, indicating anticipated dividend growth over the next year. The company's dividend growth rate over the past three years stands at 3.70%, which escalates to 6.40% over a five-year period, and a remarkable 11.70% over the past decade. The 5-year yield on cost for Shinhan Financial Group Co Ltd stock is approximately 4.96% as of today.

Shinhan Financial Group Co Ltd's Dividend Analysis
Shinhan Financial Group Co Ltd's Dividend Analysis

The Sustainability Question: Payout Ratio and Profitability

The dividend payout ratio of Shinhan Financial Group Co Ltd is 0.31, suggesting a balanced approach between distributing earnings and retaining funds for growth and stability. The company's profitability rank is 6 out of 10, reflecting fair profitability. Consistent positive net income over the past decade underscores its financial health and supports the long-term sustainability of dividends.

Growth Metrics: The Future Outlook

Shinhan Financial Group Co Ltd's growth rank of 6 suggests a fair growth outlook. However, the company's revenue and earnings growth rates have been modest, underperforming a majority of global competitors. This could signal a need for strategic initiatives to enhance growth and ensure the continuation of dividend payments. The 5-year EBITDA growth rate also trails behind many competitors, highlighting areas for potential improvement.

Next Steps

Investors considering Shinhan Financial Group Co Ltd's dividend prospects should weigh the company's consistent dividend history against its moderate growth performance. While the payout ratio and profitability indicate a sustainable dividend policy, growth metrics suggest that the company may need to pursue further avenues for expansion to maintain its dividend growth trajectory. For those seeking high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener to discover opportunities aligned with investor yield objectives.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

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